Roger, let’s start at the very beginning. What exactly is neuromarketing?

I use a broad definition of neuromarketing, and include any use of brain and behavior science to inform marketing and product design. A tighter definition might focus on using techniques like fMRI or EEG to evaluate consumer reactions to specific ads, brands or products. Techniques like biometric measurements (heart rate, skin conductance, etc.) and implicit testing (timed responses), aren’t entirely neuroscience-based but are usually lumped into neuromarketing.

No matter how you define neuromarketing, the underlying theme is that it’s necessary we understand the non-conscious or emotional processes that drive consumer decisions.

So does this mean that marketers have been getting it wrong all these years? I thought the ability to capture data and analytics fixed this a long time ago.

Some marketers got it right long before anyone thought about applying the tools of neuroscience or even persuasion psychology to marketing. Advertising legends like David Ogilvy certainly understood that emotional appeals could be far more effective than rational/logical ones.

But even today I see far too many marketers focused on features, specifications and price. These things may be important, but often the decision is driven by other factors. I agree with the statement that people “decide emotionally and justify rationally.”

I think data and analytics are important and have a huge role to play. They measure actual behavior, which is infinitely more reliable than the older approaches that were driven mainly by guesswork. Combining real-world behavior data with neuromarketing-based methods is powerful, whether used at a personal level or as a segmentation strategy.

Is there anyone using neuromarketing successfully? Can you tell us what exactly they are doing and what kinds of results they are getting?

Most major brands use some kind of neuromarketing techniques, but very few are willing to talk about it.

Generally, companies use neuromarketing techniques to evaluate ads and products before they commit major dollars. The benefit they get is a reduction in the cost of ineffective ads and failed products. They aren’t trying to create “super ads” that will turn consumers into mindless buying machines as some consumers fear. That simply can’t happen.

Some studies have shown that as much as 80 percent of advertising fails to significantly increase consumer perception of the brand. Not only is this a huge amount of wasted money for advertisers, it’s a terrible thing for consumers who have to absorb these ineffective ads to get the content they want.

Passive neuromarketing techniques are easily spotted. Visit a travel site and you’ll see messages like, “Only 2 rooms left!” and “37 rooms booked in the last 24 hours!” These are clear uses of Robert Cialdini’s principles of influence—“scarcity” and “social proof.”

Many companies are adding behavioral science units to be more effective in both marketing and other areas of their enterprises. Walmart, for example, is currently recruiting top academics to focus on topics like digital product design, health and wellness, customer experience, and much more.

So for the banking industry, this is an interesting subject. Our clients frequently tell us that satisfying customers is becoming even more challenging. It sounds like neuromarketing could help. How do they start?

I think a variety of neuromarketing approaches are useful for banking. At first sight, financial products appear to be very rational, logical things—interest rates, terms, documents, and so on.

In fact, many financial products are nearly identical commodities. It’s unlikely that one bank is going to offer far better rates than its similar competitors. This means that the consumer decision will probably be driven in large part by non-conscious factors—emotion, brand perception, etc.

So, a bank that doesn’t focus on emotion and non-conscious factors will miss a big opportunity to differentiate their brand and their products from the competition.

Here’s an example: When I lived in Indiana, we had a regional bank, 1st Source. They were locally based, although some aspects of their business were national or global. In our local market, they ran the same ad for many years. This animated ad portrayed a small businessperson seeking a loan and getting treated poorly by big national banks. Then, as you might expect, the 1st Source banker welcomed him and treated him as an equal.

This is a classic social-identity play. “We are smaller, like you. We are from Indiana, like you.” Robert Cialdini’s new book, Pre-Suasion, calls this invoking the principle of “unity.”

Do you have some favorite neuromarketing tactics that seem to work from company to company? Could you share a few?

Although there are some cultural variations, the basic principles of influence psychology apply universally. I just mentioned unity—that’s very powerful when a company has a strong regional identity or a tie to a cohesive group.

But there are many other tools that can be employed. Some are fundamental principles, like scarcity and social proof. Others are quirkier, like using cognitive biases. These biases reflect our brain’s wiring—we are more influenced by the possibility of loss than the chance of a gain, for example. Another example is the word “free.” Many studies have shown that word has a much more powerful effect on our brains than any absolute cost savings involved.

Many financial institutions employ choice architecture to nudge customers in a desired direction. It’s been shown that opting people into a retirement plan as a default produces much higher participation than if they must actively choose to opt in.

There are literally hundreds of techniques that can be used, and each situation needs to be individually evaluated to choose the one or two that will be most appropriate and effective.

Many financial products are nearly identical. This means the consumer decision will probably be driven in large part by non-conscious factors—emotion, brand perception, etc.

What does the future look like for neuromarketing? Do you see more companies adopting some of these practices?

There are a few major trends that make the future for neuromarketing really exciting. First, the cost of neuromarketing studies is falling quickly. In the past, most studies were conducted in a lab environment. Now, pervasive mobile device use and new technologies like webcam-based facial expression recognition are allowing big samples to be tested at much lower cost.

I’m also seeing a lot more acceptance among both large and small firms that their customers aren’t making rational, logical, robotic decisions. These firms are stepping up their use of emotion and non-conscious marketing approaches.

Your very successful book on this topic, Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing, was published about 5 years ago. Have your ideas evolved even further since then?

I’ve been focused on non-conscious decision making from the start, so there’s been very little evolution there. But, I’ve seen how difficult it is to balance competing factors in an ad, on a home page, or in marketing collateral. It often comes down to a big meeting. Product people want to talk about features and specs. Sales people may think price is the most important factor. Others want to focus on brand. And, perhaps someone read Brainfluence or one of the other guides to the space and wants to include cues based on neuroscience or psychology.

To that end, I created a simple model: The Persuasion Slide, which breaks the process into four parts using the metaphor of a playground slide. And, each of the elements considers both conscious and non-conscious motivators. Anyone interested in The Persuasion Slide can search Google and find a variety of free resources.

My current book project has the working title Friction: How to Harness the Invisible Force that Thwarts Progress in Business, Nations, and Life. It was inspired by one of the four elements of my slide model: friction. I look beyond marketing and conversion to show how friction is a key factor in the success of businesses and even nations.

A focus on friction elimination explains much of the success of disruptive companies ranging from Amazon to Uber. In a somewhat different way, it explains why 30 years ago India’s economy was larger than China’s, but today is just an eighth as large.

I’d be happy to hear about any friction stories your readers would care to share!

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